Bewkes gets tough with 'TV Everywhere' holdouts

DavidB. Wilkerson

CHICAGO (MarketWatch) -- Time Warner Inc. Chairman and CEO Jeff Bewkes on Wednesday dismissed the complaints of content providers who want more money if their TV shows are watched online as part of the "TV Everywhere" initiative.

"TV Everywhere," spearheaded by Time Warner
TWX, -0.45%
seeks to make TV shows available over the Web only to those viewers with a paid video subscription. Comcast Corp.
CMCSA, +0.08%
has launched a trial of the concept, called On Demand Online, in 5,000 homes.

While 24 networks are taking part in the Comcast trial, including Time Warner's Turner cable networks, broadcaster CBS, AMC, BBC America, and Hallmark Channel, Walt Disney Co.
DIS, -0.02%
has so far avoided the "TV Everywhere" experiment because it doesn't offer the Disney networks enough money in return for allowing their shows to be streamed over the Web.

"A new opportunity to reach consumers is very attractive ... [but] we want to do so in a way that delivers proper compensation [to us] for that value," said Disney Chief Financial Officer Tom Staggs, who spoke at the Goldman Sachs media conference on Tuesday.

During his session at the conference Wednesday afternoon, Bewkes scoffed. "[The content providers are] not the ones who are going to the effort and expense of making this possible," he remarked. "The ones that are making this possible are the distributors -- the telcos, the satellite companies, the cable companies."

The Comcast trial utilizes an authentication system to verify that the user is a Comcast subscriber before allowing access to streaming content.

Bewkes added that shows viewed online will be counted as part of Nielsen's "C3" ratings system, which measures viewership of ads viewed on digital video recorders up to three days after a program airs on television. For this reason, the existing TV ad model "continues, and thrives," Bewkes said. "You don't have to build a new model. You've already got it."

The networks participating in the Comcast trial have different approaches to commercials in the online environment. Some are experimenting with an abbreviated ad load, which might include an ad before and after the program with few interruptions in between.

"And then there are networks on the other end of the spectrum who are very interested in testing a full ad load, similar to what you would watch on television," said Matt Strauss, senior vice president of new media at Comcast, in an interview with MarketWatch last week.

Bewkes also said Wednesday that Warner Bros.' demand that video rental firms such as Redbox wait 28 days after a DVD release to make them available for rental is merely a sensible way to preserve the economics that make film production possible.

Though there may be a place for low-cost DVD rentals, "It can't be while we're trying to offer higher-cost rentals or trying to sell a copy," Bewkes remarked.

Warner Home Entertainment recently said it would enter into negotiations with Redbox -- and subscription-based mail order DVD rental providers such as Netflix
NFLX, +2.47%
-- that may revise the terms of the revenue-sharing agreements they have with the studio.

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